FINANCING EDUCATIONAL INNOVATIONS AS A FACTOR IN INCREASING THE COMPETITIVENESS OF HIGHER EDUCATION INSTITUTIONS IN EU COUNTRIES IN THE CONTEXT OF THE KNOWLEDGE ECONOMY

Abstract

This article explores and empirically validates the use of educational innovation funding as a driver of higher education competitiveness in the knowledge economy. The study is relevant because increased financial resources alone do not guarantee an institution's strengthened international, research, and partnership position, as these outcomes depend on the funding structure and the efficiency with which resources are converted into projects, mobility, and the international recruitment and training of researchers. This article aims to develop a comprehensive approach to assessing the relationship between educational innovation funding and higher education competitiveness. The dataset is based on the 2018 European Tertiary Education Register for 82 universities in 8 European countries. The methodology combines winsorization and data normalization, the analytic hierarchy process, entropy-based weighting, integrated assessment, LED, a dynamic effect analysis (DEA) model with varying returns to scale, robust regression, clustering, and scenario modeling. An index of educational innovation funding is constructed based on the intensity of research expenditures, the share of external funding, capital expenditures, and resource provision per applicant. Competitiveness was assessed using participation in EU framework program projects, partnerships with enterprises, Erasmus incoming mobility, the share of international applicants, and the intensity of PhD training. A strong positive rank correlation was found between the funding and competitiveness indices. Robust regression explains 48.3% of the variance in the final index, with the most consistent positive effect coming from resource allocation per applicant. A scenario of balanced strengthening of research, external, and infrastructure funding increases the predicted average competitiveness value by 7.23%, exceeding the results of single-channel scenarios. The practical significance lies in the applicability of this approach to budgeting innovation portfolios, comparing institutions, and identifying potential for converting financial resources into competitive advantages.